What Makes Customer Satisfaction Research Useful?

Much has been written in the last couple of years about the promise of customer satisfaction research (CSR) to improve performance or shorten development cycles for businesses and organizations. This work is particularly germane in North America, where growth in many industrial and commercial markets is peaking and companies are scrambling for competitive advantage. The concept is simple: capture customer feedback and use the data to set business priorities.

Customer satisfaction data is routinely gathered to support continuous improvement programs like TQM, ISO and Six Sigma. The answers to the questions "How are we doing?" and "What should we do better?" are the building blocks of a customer relationship based on measurable value. Answered correctly, they track improvements in the business relationship and identify areas for improvement. However, translating the answers into meaningful actions is difficult.

The issue is not whether or not you are getting information about customer satisfaction; it is whether or not you are using information about customer satisfaction to act differently. Generally, two factors cause weak CSR: uninvolved stakeholders and useless data.

Let's explore what makes CSR useful.

An engineered products manufacturer had recently been purchased by investors seeing promise in their technological leadership. Research was commissioned to help the new team understand current satisfaction and long term business durability.

They were shocked to find that more than 90% of the business was at risk. While sales teams showcased and closed many initial orders, lengthy start-ups, late shipments and poor quality pushed customers away once they had adopted the technology. The manufacturer was, in essence, training customers to prefer the technology on behalf of their competition.

Employees were frustrated too. They had heard complaints but hadn't digested the consequences. Out of necessity, they assumed ample supply of new customers to replace the disgruntled ones. The costs associated with lost business hadn?t been clear.

The team dove into the research, put answers into context, mined new feedback, and made survey adjustments even while they collected more information. They isolated common themes, asked why, and tested actions steps to recover the business. In the end, improved communication systems solved internal conflicts and kept customers in the loop. Investments in new secondary operations simplified customers' processes and improved predictability.

With these changes, the manufacturer was able to recover tenuous relationships, improve its pipeline and the satisfaction of its customers and employees in about a year. Today, the company monitors satisfaction routinely, taking care to not only benchmark against previous year's performance but to test new ideas and gain a clearer understanding of the feedback it receives informally.

So, how to ask the question "How are we doing and what should we do better?"

When a business process like the collection of satisfaction data hardens into concrete steps, it loses flexibility, become sterile and impractical and as a result, can erode value. When data collection is exercise in scoring, ranking, and polling, it blocks inspiration, the creative process, decision-making, relationship-building and new learning that comes from effective listening.

Weak CSR:

Is a static process: A survey of customer satisfaction done once is a popularity contest. Done over time it can be a tool for decision-making, because it can show progress or setbacks. However, if you ask the same customers the same questions, year after year, eventually they are going to ask you to stop. It is very important to evaluate customer satisfaction routinely, to expose changes, but it is equally important to change it up to test new ideas, show responsiveness and build better relationships over time. Customer satisfaction is dynamic. The CSR process should be too.

Ignores Context: Most CSR surveys assign a subjective value to tasks or functions like delivery, development, sales management, or customer service. If, however, the satisfaction score isn't understood in terms of its relative importance to the customer, it is difficult to see impact on business health. For example, a customer might state that their satisfaction with pricing levels is relatively low -- say a 3 on a 7 point scale. Without context, a natural reaction might be to re-examine pricing policies -- and those of competitors -- to look for guidance. If, however, pricing scored low in terms of importance in comparison to lead-time, a supplier would know that improvements in delivery could dampen the need for reactionary discounting. By knowing the context in which attributes are evaluated, suppliers can better allocate efforts, grow sales and save margin.

Before asking "How we are doing?" CSR should first establish the importance of an attribute in order to provide context.

Is Quantitatively Biased: CSR surveys are often biased by the preponderance of closed questions like force ranked lists and 1-7 scoring. Learning about low satisfaction with service may be informative, but investing the time to uncover ideas for improvement is what is crucial to improving a customer relationship. To illustrate, a customer with little tolerance for late deliveries may score delivery as important but add that a simple call to reschedule would satisfy. Without this background, a manufacturer might have invested to retool, having overestimated the hazard. Always ask "Why?"

Keys to Success

Treat customer satisfaction as philosophy

It's counter to think that something as fundamental as listening to customers should be institutionalized, but in these days of consolidation and distant markets, it is absolutely necessary.

As the knowledge economy continues to evolve, we see that high performers are distinguished by continuously improving CSR processes that get as much attention from process experts as LEAN or Six Sigma. A good first step is to view CSR not as a project thrown over the wall to the new MBA intern, but instead, as a philosophy of listening and interacting with customers.

Design CSR that can flex and learn, like people do

It's also counter to think that CSR should be designed to flex with what is known at the moment, but this is actually a sign of effective learning and communication, which are the key ingredients to usefulness. The ability of a research team to make changes along the way depends on whether they see and understand the trends early enough. The important factors determining CSR success are not sample size or repetition, but research transparency and the volume of critical thinking done during the project.

Act Small

CSR exists because companies are big. The complexities that are introduced when groups enlarge encumber simple activities like listening, thinking and doing. But these are the activities that create value and wealth. To make them simple again, build a great CSR process to do the basic, smart things that entrepreneurs are forced to do.

It's Never the Data

If you ask "How are we doing and what should we do better?" tomorrow, the answers that you get will be different than the answers you got yesterday. The most important ingredient to CSR is the action that you take with what you learn, and the ability of the customer to see and feel value from those actions.

Marian Singer is a partner at FiveTwelve Group, Ltd., a research and consulting firm that works to improve way that businesses, investors and member organizations listen to their customers and markets and how they act on what they learn. www.fivetwelvegroup.com

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